Applying for E-Rate funds is complex and often frustrating. But Chuck Jones, chief of technology at Jackson-Madison County Schools in Tennessee, says it's worth the effort because the money funds the district's schools with the telecommunications and Internet connectivity they need.

Since 1998, the E-Rate program run by the Federal Communications Commission has distributed roughly $2.25 billion a year to schools and libraries for phone and Internet services and networking equipment. Depending on the location of schools and economic need, districts receive discounts of up to 90 percent on services and equipment, which can amount to more than $1 million a year in subsidies.

In April, the Jackson-Madison County school district received $811,147 in E-Rate funds to equip 11 of its 28 schools with new networking equipment, which provides faster, more reliable connections. Jones installed Enterasys Gigabit Ethernet switches and CAT 6 cabling, which deliver gigabit speeds to every classroom. They also installed Wi-Fi equipment, giving students and staff wireless access for the first time. The network upgrades will allow Jones to increase educational technology in each school's classrooms.

“Prior to this, we were on a shoestring budget and bandaged everything together with basic 10/100 megabits-per-second connectivity,” Jones says. “My biggest push right now is upgrading our network infrastructure. We need that backbone so we can take advantage of streaming videos and other cutting-edge applications in the classroom. And now we can handle that in those schools.”

Service Mandate

The FCC created E-Rate to ensure that schools and libraries, particularly those in low-income and rural areas, have affordable access to telecommunications and Internet services. E-Rate offers annual subsidies ranging from 20 to 90 percent of the cost of eligible services. Discount levels are based on the percentage of students eligible for the National School Lunch Program and the location of schools. Rural schools can receive slightly higher discounts than urban schools. If a school has a 90 percent discount, the E-Rate program will pay for 90 percent of the cost of equipment or service, while the district pays the remaining 10 percent.

Under E-Rate, basic telecommunications, such as phone service, Internet access and e-mail, are considered Priority 1 funding. If money is left over, the remaining dollars are distributed among applicants seeking Priority 2 funding, which pays for the infrastructure inside buildings that take advantage of the connectivity. That includes networking equipment, wiring and basic maintenance costs.

For schools facing budget cuts, E-Rate can make a big difference, says Mary Talentinow, director of contracting and E-Rate services at Twin Rivers Unified School District in North Highlands, Calif. Last year, the district applied for $3 million in Priority 1 funding and another $1 million in Priority 2 funding.

“Every school district in California is desperate for money because of budget cuts,” Talentinow says. “Getting $4 million for telephones, cell phones and all those services and technology eligible under E-Rate will help our budget. And with the bulk of the costs for those services reimbursed under the E-Rate program, we are in a better position to afford other things that can improve our schools,” Talentinow says.

E-Rate's Benefits

During the first decade of the E-Rate program, Jackson-Madison County Schools received about $200,000 to $300,000 annually for phone and Internet services. But district administrators never applied for Priority 2 funding until recently because they didn't think they qualified. The district has an 82 percent discount. With poorer districts getting priority (beginning with schools that are given a 90 percent discount), Jackson-Madison County believed there would be nothing left for their district.

They were mistaken.

When Jones became head of IT two years ago, he hired an E-Rate consultant to guide him through the application process, and he learned that they could apply for Priority 2 funding for the specific schools that can receive the higher discount. So in 2008, they requested Priority 2 funding for 11 schools that had an 89 percent discount – and 14 months later (last April, to be exact), they received the funding.

The E-Rate project totaled $911,401. Because of the 89 percent subsidy, E-Rate pays $811,147, while the district pays $100,254. With the funds, he purchased new Enterasys switches and Wi-Fi equipment, built new networks at eight schools and made upgrades to three others.

The Priority 2 funding has made a big dent in Jones' to-do list. He previously used district funds to build a new network at one school. Add that to the 11 schools that took advantage of Priority 2 funding, and 12 of the district's 28 schools now have state-of-the-art networks. He's optimistic that he will receive Priority 2 funding for three additional schools for the current 2009 funding year. For the remaining schools, Jones hopes to use district funds to upgrade three to four schools a year until all the schools have new networks.

Jones estimates that planning for E-Rate funding takes about 15 percent of his time. But it's time well spent, he says. He is already working on next year's funding cycle.

“The Priority 2 funding we received was a big deal for us,” Jones says. “Any amount we don't have to spend on infrastructure we can spend on other things. We can allocate money for computers and smart boards that utilize that infrastructure. And that makes an impact.”

E-Rate Application Best Practices

Here are some tips to successfully navigate the E-Rate application process:

1. Think about marketing. To try to get a higher discount, districts should consider a marketing campaign to get parents to fill out the free- and reduced-lunch questionnaires, says Mary Talentinow of the Twin Rivers Unified School District in California. This year, the district has encouraged parents to fill out the questionnaires, and as a result, the number of respondents so far has increased from 60 percent to more than 80 percent. For the upcoming funding cycle, the district hopes to achieve a 90 percent discount level – up from 87 percent for the previous year, she says.

2. Be aware of deadlines. Stay on top of deadlines and stay organized, because you have to juggle three years of E-Rate funding at once, says John David Son, CIO of Marshall County School District in Kentucky. Son uses Priority 1 funding for phone serv­ice and fiber connectivity between schools. “At any point in time, you are dealing with reimbursements from the previous year, in the process of filing a 470 form or RFP for the current year, while you are finishing up some planning for next year,” Son says.

3. Build E-Rate expertise and institutional memory. The process goes most smoothly when one person in the school district takes responsibility. But it's good to have two people go through training and become savvy, both for quality assurance and for backup, says Mark Miller, president of the nonprofit Miller Institute for Learning With Technology.

If a school doesn't have an E-Rate expert, seriously consider hiring a consultant to walk you through the process, says Chuck Jones, CIO of Jackson-Madison County Schools in Tennessee. CIOs can also get free help from state coordinators or regional educational organizations, through which neighboring CIOs can give each other advice, Son says.

4. Document everything. All documents, including losing bids, must be retained for five years after the service ends. That's because audits can happen at any time. Schools must demonstrate that they followed their tech plan and procurement rules.

Photo: Diane Diederich/Getty Images

5-Step E-Rate Application Process

The E-Rate application submission process typically begins in mid-November and lasts until early February. Here are the five critical steps:

1. Develop a detailed technology plan. Your plan must exist before Form 470 is filed. 2. File FCC Form 470. Fill out the form that details the services or equipment the district needs. 3. Enter a 28-day waiting period. After filling out Form 470, schools must solicit and compare competitive bids for the services or equipment requested. 4. Approve contracts and file Form 471. After selecting vendors, schools must sign contracts and submit Form 471. 5. Respond to application review. Program Integrity Assurance (a unit of the Universal Service Administration Company's Schools and Libraries Program) reviews the applications and will contact schools with questions and concerns, such as contract problems. Schools must answer promptly and supply plenty of documentation.